Achieving is Believing

[Review] American Express Blue Cash Preferred

At a Glance

The American Express Blue Cash Preferred boasts one of the highest cash back rates to date: a whopping 6% cashback for all grocery store purchases. Its other rewards at 3% for gas and select department store purchases are also formidable in their own right. As a “High Spend Category Card,” this should have a place in almost everyone’s credit portfolios as groceries tend to be one of the highest spending categories for the average person.

The Facts

Card

American Express Blue Cash Preferred

Rewards

6% cashback on all grocery store purchases (up to $6,000 per year)

3% cashback on all gas station and select department store purchases

1% on all other purchases

Annual Fee

$75

Sign-up Bonus

$150 when you spend $1,000 in the first 90 days

Foreign Transaction Fee

2.7%

Interest Rate

12.99% -21.99%

Miscellaneous

0% APR on purchases for 15 months

0% APR for 15months on each balance transfers

Return protection on purchases

Roadside assistance

Free ShopRunnermembership

Car Rental Loss and Damage Insurance

Extended warranty on purchases

Purchase Protection

Travel Accident Insurance

Credit Portfolio Role

High Spend Category Card

Credit Score Needed

Medium/High – High

In-depth Discussion

As it stands, the Blue Cash Preferred card gives you the best possible cash back rate for grocery purchases coming in at 6%. This card will significantly increase your overall average cashback assuming you spend a decent amount of money at grocery stores (which who doesn’t?). The category of grocery store is pretty broad but wholesale stores like Costco do not count and some hybrid grocery stores like Walmart or Target may not be coded as grocery stores. Other than that, all other traditional grocery stores should be fine. What is great about this 6% cashback is that it covers everything purchased at a grocery store. This includes movies, magazines, cookware, and gift cards. The only “catch” is that you are capped at $6,000 per year for the 6% cashback and everything over that is only 1% cashback. However, $6,000 is pretty generous for most people’s spending and will get you $360 a year from your grocery purchases alone if you max the $6,000.

Let’s not let the other cashback categories this card offers get overshadowed. 3% cashback on all gas and select department store purchases is a very competitive rate. While not the highest compared to other cards, 3% is a very lucrative cashback rate and there are no spending caps for these purchases which means you can utilize it all year without worrying about going down to 1% like with the grocery purchases. “Select department stores” is the terminology that American Express uses for the other 3% category which doesn’t quite explain exactly what stores qualify. From what I have seen, most cardholders report getting the 3% cash back at Nordstrom, Kohl’s, Dillard’s, J.C. Penny, Lord & Taylor, Macy’s, and Sears to name a few.

There is a $75 annual fee with the Blue Cash Preferred Card. The amount is about average for most credit card annual fees and can be easily offset with the high cashback rewards. However, do the math and if you see yourself losing a lot of your rewards with the annual fee there is a free version to this credit card called the Blue Cash Everyday which has lower cashback rewards but no annual fee. This no annual fee version might also be an option for people whose credit scores might not be robust enough to qualify for the Blue Cash Preferred.

The Blue Cash Preferred card is not intended to be used as travel card. Due to its high cashback categories being U.S. grocery stores, U.S. gas stations, and U.S. department store, you won’t be getting much benefit using it outside of the United States while traveling abroad. In addition, the 2.7% foreign transaction fee also shows how this card should be used purely for domestic spending (although 2.7% is technically a little lower than most transaction fees, you should strive for always using a card that offers a 0% foreign transaction fee).

As with most American Express cards, there is a nice list of additional benefits that come with the Blue Cash Preferred card. Although just above this paragraph I mention this card should not be used as a travel card, it does offer travel accident insurance and car rental insurance. If you have a dedicated credit card for travel it probably offers similar benefits and is worth using for travel rather than the Blue Cash preferred card. Other hidden benefits with this card include various purchase protections and extended warranties, free membership to ShopRunner, and roadside assistance.

The sign-up bonus is modest coming in at $150 for $1,000 spent over the first 90 days but is still a very nice incentive which should be utilized if you apply for this card. For this card I would recommend you have a medium/high to high credit score (high 600s and above) and a solid reportable income. If you do not think you will get approved for this particular card I would definitely recommend looking at the Blue Cash Everyday as a possible alternative.

Conclusion

The Blue Cash Preferred is one of the top cashback cards out there. You can’t get anything better than 6% back on all grocery store purchases and the 3% back for gas and department stores is also very competitive. Although it has an annual fee, between your rewards and the sign-up bonus you should have no issue compensating for it.

There are a few things to be aware of and remember about this card. The 6% cashback is only for the first $6,000 spent on groceries each year (gas and department stores have no restriction) so if you reach that point you should look at using other cards for the rest of the year or you will be stuck with the unimpressive 1% cashback. Although 3% is a very solid rate for gas and department stores, there are other cards that might offer you slightly higher returns especially for gas stations which can go as high as 5% back. If you have a card that can get you higher cashback for those categories, make sure you utilize them instead of putting those purchases on this card. The final thing to be aware of is the Blue Cash Preferred’s strength for only U.S. purchases. Between the 2.7% foreign transaction fee and lack of the high cashback rates outside of the country, this card is not intended to be used while traveling abroad.

Because the majority of people spend a significant amount of their budget on buying food, this card has a place in anyone’s credit portfolio. The cashback categories are very high which will significantly boost your average cashback each year. You really cannot go wrong with the American Express Blue Cash Preferred card!